Monday, October 21, 2013

Indian geopolitical analyst Brahma Chellaney was recently quoted by the media as saying that “China is engaged in the greatest water grab in history. Not only is it damming the rivers on the plateau, it is financing and building mega-dams in Pakistan, Laos, Burma and elsewhere and making agreements to take the power.”

He warned that China-India disputes had shifted from land to water. “Water is the new divide and is going centre stage in politics. Only China has the capacity to build these mega-dams and the power to crush resistance. This is effectively war without a shot being fired.” According to Chellaney, India is in a weak position because half of its water comes directly from China.

On the other hand, Sushmita Sengupta, research associate at the Centre for Science and Environment in New Delhi, believes that water availability has declined to such an extent that many parts of India today face a drought-like situation.

As a matter of fact, the Indian government is opposing the construction of dams on River Brahmaputra, known as Tsangpo in China, and has gone as far as raising the issue with the top Chinese leadership. The Indian Prime Minister Manmohan Singh discussed the issue at a meeting with Chinese President Xi Jinping on the sidelines of BRICS (Brazil, Russia, India, China and South Africa) Summit in Durban. While the Indian government does not want the Chinese to build dams on River Brahmaputra, it advocates a water treaty or commission to sort out the issue.

Meanwhile, according to a Canadian researcher, China could emerge as the ultimate controller of water for nearly 40% of the world’s population. Tashi Tsering, a water resource researcher at the University of British Columbia in Canada, claims the Tibetan plateau is the source of single largest collection of international rivers in the world, including the Mekong, Brahmaputra, Yangtse and Yellow rivers. It is the headwater of rivers on which nearly half the world depends.

Meanwhile, figures provided by global institutions reveal that about 2.4 billion people live in ‘water-stressed’ countries such as China. In a 2007 report, the World Bank said that water scarcity and pollution were reducing China’s gross domestic product by about 2.3 percent annually.

The statement by Chellaney was an effectively measured effort to bring into the world’s notice India’s alleged woes on water. While the Indian government claims that the Chinese plans could reduce the water inflow into their country, it has nevertheless failed to seriously consider Pakistan’s dilemma.

The Asian Development Outlook 2013 report says: “Pakistan is one of the most water-stressed countries in the world, not far from being classified as ‘water scarce,’ with less than 1,000 cubic meters per person per year.” The report added: “Water demand exceeds supply, which has caused maximum withdrawal from reservoirs. At present, Pakistan’s storage capacity is limited to a 30-day supply, well below the recommended 1,000 days for countries with a similar climate. Climate change is affecting snowmelt and reducing flows into the Indus River, the main supply source.”

It is common knowledge that India has either started construction or has planned over 100 dams on western rivers, posing a serious threat to agriculture and hydel projects in Pakistan. These include 24 projects on the River Chenab, 52 on River Jhelum and 18 on River Indus. But most alarming are the Baglihar Hydroelectric Plant, located on River Chenab, commissioned in 2008, Kishenganga Hydroelectric Project on the River Neelum and Wullar Barrage Project located on the River Jhelum.

Regardless of the questionable ethics on water issues with Pakistan, the Indian government continues to slam the Chinese on what it perceives is its right. New Delhi should also make serious efforts to resolve the water issues with Pakistan. Due to the sensitivity of the water grab issue and its impact on Pakistan, the quicker it is done the better it will be for both countries.

As a Chinese company has distanced itself from the Iran-Pakistan (IP) gas pipeline, Pakistan is now looking to Russian energy giant Gazprom for providing necessary financing for more than a billion-rupee project.

“Russia may be the best choice for financing and constructing the pipeline,” an official said. Pakistan was willing to accept Gazprom’s offer to build its side of the pipeline, which would cost about $1.5 billion, he added. Gazprom wants its subsidiaries to engage in the project.“Russia may be the best choice for financing and constructing the pipeline,” an official said. Pakistan was willing to accept Gazprom’s offer to build its side of the pipeline, which would cost about $1.5 billion, he added. Gazprom wants its subsidiaries to engage in the project.

Though Pakistan has placed a request before the Iranian government for providing all financing for the construction of the pipeline on its side of the border, government officials believe it will be difficult for Tehran to make a commitment.

“The issue of Gazprom participation in the IP pipeline will feature in a meeting of the Pakistan-Russia joint working group next month,” the official said, pointing out Islamabad and Tehran had been going through the power transition process because of which progress on the project had slowed down.

Pakistan and Iran have to sort out technical issues to pave the way for the award of engineering, procurement and construction (EPC) contract to Iranian firm Tadbir Energy. An agreement in this regard has already been inked and will be formally signed after technical issues are addressed.

The two countries have finalised a $500 million loan deal and a high-level meeting between them is expected to be held soon to discuss the possibility of Iran providing all investment required for the pipeline. Petroleum and Natural Resources Minister, Shahid Khaqan Abbasi, is likely to lead Pakistan’s side in the talks.

A Chinese company, which had offered $500 million for the pipeline, pulled out after Pakistan refused to extend the validity of its bid.

After inviting bids from interested companies, Inter State Gas Systems, a state-owned Chinese company that handles energy import projects, had selected Panyn Chu King Steel Limited of China as a qualified bidder, which would provide pipes at the rate of $1,650 per ton including compressors. The company sought extension in the bid validity period, but the government turned down the request.

“As the Chinese company is no more interested in the venture, the government is now banking on Iran and Russia to fund the laying of gas pipeline in Pakistan,” a source said.

Iran has already committed to providing $500 million to finance the pipeline, but now the government wants Tehran to increase the credit line. Against the financing, Pakistan will award EPC contract to Iran-designated firm Tadbir Energy.

Under the project, Pakistan will import 750 million cubic feet of gas per day (mmcfd), which can be increased to one billion cubic feet. Of the quantity, the Government of Balochistan seeks 250 mmcfd for consumption at the Gwadar Port, therefore, the central government is expected to go for enhanced supplies from Iran to cater to the needs of the province.

Thursday, October 10, 2013

Concerns over security could hinder China’s ambitious plans to build a road and rail network and economic corridor from the western Xinjiang region to Pakistan, a Chinese official has said.

Long-discussed proposals to take forward the China-Pakistan Economic Corridor got a boost last month when newly-elected Prime Minister Nawaz Sharif visited Beijing and framed the project as one of his government’s priorities.

The corridor envisages improving road links from Xinjiang to Pakistan, including expanding and bolstering the Karokaram Highway, as well as building railway lines and pipelines from Kashgar in Xinjiang to the Gwadar Port on the Arabian Sea, which could open up a much-needed alternative route for energy imports.

The security implications of the plan have concerned India as the corridor runs through Pakistan-occupied Kashmir, which borders Xinjiang.

This week, a top Chinese planning official acknowledged that despite the recent attention, it could still be a long while before the project comes to fruition.

At a meeting in Beijing discussing the plan, Lin Dajian, a top official in the foreign affairs office of the National Development and Reform Commission, the planning authority, said “security issues and challenges” could impede the project, according to a report by the official Associated Press of Pakistan.

Pakistan’s Ambassador to China Masood Khalid, who attended the meeting, expressed optimism about the corridor. He said “a task force and secretariat” had been set up to take forward the project, while a team from Pakistan would visit China soon “for further discussion”.

China’s growing concerns over security in Pakistan, in the wake of recent kidnapping threats to workers, have also slowed down other infrastructure projects executed by Chinese companies in the country. Analysts say China’s investments in the country have, as a result, not kept pace with the often lofty rhetoric hailing “all-weather” relations.

Only a day after Ms. Lin’s note of caution, Xiong Lixin, vice-president of Sinohydro, one of China’s biggest hydropower companies, was quoted as saying Chinese workers had to be escorted to construction sites in Pakistan in helicopters by armed guards.

Mr. Xiong, who earlier worked on the Gomal Zam dam project, said work on the project came to a halt for two years in 2004 “after unidentified militants kidnapped two

Chinese engineers working on the project at the north-western border of Pakistan”, the official China Daily reported. One worker was rescued but the other was killed. In 2011, the Kingho group, a coal mining firm, said it was reconsidering a $19-billion investment – the biggest by a Chinese firm in Pakistan – in Sindh province on account of security concern.